Category Archives: Our Charts

Global market trends: markets in June

Global market trends in June were a bit more bullish compared with May, as investors received positively the messages from the main central banks. These institutions are still very important in the market confidence and sentiment, because the economy does not have definitive recovery signals.

Market trends in June in T-Advisor

In the case of Europe, the ECB decided finally to use the artillery against the low inflation and, behind that, the risk of deflation. Chairman Draghi already gave a clear hint in the May meeting, what was not typical from the institution. The decisions, however, were welcomed but disappointed partly the markets, although even the Germans supported them. Investors want a European quantitative easing as in US.

Market trends in Europe in T-Advisor

This quantitative easing is coming to an end at the other side of the Atlantic. Mrs. Yellen cut in every meeting US$ 10 bn and in June she did it again, but there is no reaction in the market about it. The important is the Fed outlook about US growth, because it has to do with inflation and rates. And Yellen still sees some clouds. Investors are sure that a rate increase will not take place for a very long time and this outlook push up US indices to records.

Market trends in US in T-Advisor

Crossing Río Bravo to the South, the earthquake comes from Argentina. The country, which was quite bullish in the last months, received suddenly an unexpected hit from an American court. Argentina has to pay the hedge funds or declare the default. On the contrary, Mexican stock exchange is moving very positively.

Market trends in Latam in T-Advisor

What Asia refers, China economic data are better or not so bad as expected. That helps the markets in the continent. Also India, the most bullish in the T-Advisor ranking, is profiting from the high expectations of the new government. On the contrary, the long electoral process in Indonesia is affecting negatively the local stock exchange.

Market trends in Asia in T-Advisor

World global market trends in May

Markets improved slightly their bullish trend, always with very low ratios, as there are still doubts amongst the investors about the strength of the economic recovery, mainly in US. There is also another ingredient in this financial mixture: US markets are touching their highest levels and many analysts are wondering when the correction will come.

Global market trends in T-Advisor

US market trend in T-Advisor

But the eyes are on Europe. ECB meets tomorrow to take possibly historical decisions in its monetary policy. Low inflation figures are warning European authorities about the risk of deflation. One of the main points is the exchange rate with other currencies. Europe is importing deflation with the high rate against dollar and others and exporters are suffering to sell abroad, apart from the deeper trouble: the credit restrictions. These problems have effects in the economic development and employment perspectives. The fear is that the ECB will not be tomorrow brave enough and disappoints the markets, which are really expecting many measures, not only a rate cut.

Europe market trend in T-Advisor

The bullish trend improved also slightly in Asia. The main news was the election of the conservative Narendra Modi in India as prime minister. Markets have high expectations about him and Indian market experienced a strong bullish trend this month, so T-Advisor figures. The results of the election in Indonesia were also positively welcomed by the investors. However, Japan and China carried on their weak market trend.

Asia market trend in T-Advisor

Finally, LatAm showed the best trend in world markets pushing by Argentina. Its government announced an agreement with its lenders to pay the debt. Argentina was the instability focus in the lasts years in the continent and the deal about the debt opens new expectations for investors. On the other side, Brazil remains quite weak.

LatAm market trend in T-Advisor

World global trends: markets in April

The main point to take into account in the market evolution in April has to do with the US. If we compare the figures with last month, the country trend changed from 40% to 25%. That was a drop! Such decrease is related to the economic outlook in the (still, but probably for short time) first world economy.

Global Trends april in T-Advisor

If we take a look at the chart in the American market, there is a downward line at the beginning of the month. March employment data published in those days warned investors about the recovery, because they were far from expectations.

US Global trends in april T-Advisor

These figures were confirmed by the GDP published at the end of April, the weakest in three years. Under these conditions, Fed Chairwoman Yellen and the FOMC were cautious in the statement on 30th. A rate increase has been delayed.

On the other side of the Atlantic, European markets are still weak, partly because of the contradictory statements from ECB chairman and its members. Although Mr. Draghi has insisted in the readiness for non-conventional measures, Germans are reluctant, despite the low inflation very far from the 2% bar.

Europe global trends in april T-Advisor

Emerging markets were also bearish. Asia suffered from the weakness of the American markets and also from some data from China. Last March, these exchanges benefit from the good expectations about the elections in Indonesia and India, but it must be waited for the results, as the process in India lasts a month and Indonesia publishes the results in some days, four weeks after the vote.

Asia global trends in april T-Advisor

Finally, the lowest point reached in February was the beginning of a recovery in LatAm markets. They registered the best position (29%) amongst all regions. The low prices in this area are moving positively the markets and some of these countries have the best positions in the T-Advisor global trends, as Argentina or Mexico.

LatAm global trends in april T-Advisor

World global trends: markets in March

An approach to global trends in March has to take into account the last US Federal Reserve meeting. Janet Yellen began her term making some changes from Bernanke’s heritage. She prefers to look more the job statistics before an increase in the interest rates. This announcement moved the market, mainly in the US.

Global markets in march

Our chart shows that 40% stocks have a bullish trend in the US, against the 36% in February. The chart below is clearer: the trend in the biggest world economy is more positive. The prices were low in February and that point attracted investors, together with the Fed outlook.

US Global Trend in T-Advisor

On the other side, emerging markets are still quite bearish. In LatAm the trend seems to improve, but the original point was so low that it will take still some time till the positions show a higher point. However, the line up appears to be solid, as it accounts a 23% against a 13% in February.

LatAm Global Trends in T-Advisor

But the more interesting development took place in Asia. Although the general trend in the continent is bearish, there is a jump in two countries to the top bullish positions: India and Indonesia. The reason lays on the elections. Both countries have elections in the beginning of April and the perspective is that new governments will be more “business-friendly” as their predecessors. The Indian and Indonesian stocks exchanges experienced in the last week a soar: more than 50% of the companies have a bullish trend.

Asia Global Trends in T-Advisor

This situation in Asia is an exception, because the other main Asian stocks are in the lowest positions: China has less than 10% bullish; Hong Kong and Japan, less than 20%; and Singapore, less that 30%.

Generally, stocks have chances to increase in the next months, as the beginning point is very low. Experts comment that April is a typical bullish month. Let’s see what we discover in four weeks.

World global trends: bearish o bullish in February?

February is usually an unstable month for the markets. In this case, emerging markets have suffered more from this instability. We have already spoken about it before. The current quantitative easing cut made by the Federal Reserve affects negatively the capital flows to these countries.

T-Advisor charts show clearly these global trends. Although general markets are not specially bullish, the bearish trend is harder in Asia and Latin America:

Global trends february by T-Advisor

Even more, the worst markets in our list (from the last) are Peru, Brazil, Japan, Chile, South Africa, Mexico and Turkey. With the exception of Japan as developed country that is living some different conditions, the others are emerging markets mainly in Latin America.

Global trends LatAm by T-Advisor

Emerging Asian countries are a bit better that always in a bearish trend:

Global trends Asia by T-Advisor

In this case, the drop begun last year in June. Although the line was stable in the autumn and the beginning of the year, it registered a new hard decline in February.

Just to compare: Latin American countries quoted before have less than 20% of their listed companies with a bullish trend (in Peru and Chile, less than 9%), while Asian countries as China, Singapore, India and Hong Kong have between 20-25%. The only exception in this trend in emerging markets is Argentina, with some different components in its economy.

At the top of this list, the leaders were continuously in February the denominated PIIGS (Portugal, Italy, Ireland, Greece and Spain). Their markets, as we published before, were cheap for investors and attracted capital flows in their exchanges. In these cases, they had always bullish more than 40% of their companies (in Portugal, up to 60% or a bit more).

This kind of charts helps investors to detect risk and investment chances in the current pricing of the markets.

2014: back to growth… sure?

Growth outlook 2014 US and Eurozone

Economic outlook for 2014, following the main institutions’ projections, is more positive than the years before. The slope upwards is far from being strong, but there is a consensus in some points.

First of all, US will be back to growth, with projections over 2.5% for the GDP next year. The more optimistic is the Federal Reserve, with a perspective between 2.8% and 3.2%. It is not very surprising, as this institution decided yesterday to reduce the quantitative easing programme. The Fed sustained that the economic improvement is “consistent”. The outlook for the OECD is also similar to the Fed. Just the IMF is a bit far, because its last projection was in October, in the days of the Administration shutdown.

Secondly, the Eurozone will have a low growth for 2014. It also surprises that the ECB is the more optimistic (1.1% GDP growth) against the OECD and the IMF, which agreed in this projection in 1.0%. Last monthly bulletin from the ECB stated that the risks for the Eurozone are still on the downside. The central bank underlined the uncertainties in the global money and financial market.

The point is that the general growth pace is still slow. Emerging economies will suffer in 2014 a slower growth and there are doubts about their reaction with a further tapering from the Federal Reserve and the instability in the currency markets. What Japan refers, Abenomics (the economic policy measures developed by Primer Minister Abe) will hit hard in the inflation, as a result of the monetary expansion, but the country will return slightly to growth.

In any case, the main institutions do not close the crisis yet. Although all try to show a more positive tone, the risks are still persistent, mainly in the credit markets and the investment, but also in the consumption, affected by the general uncertainty. Finally, the point in 2014 is still in the monetary policy measures, as all market agents react strongly to every decision and comments from the central banks.

ETF flows follow the US hesitations

ETF flows: World map with asset share in areas

ETF industry changes the strength of their inflows following US hesitations and sighs. The QE tapering or not, the debt ceiling, the continuous uncertainty in the American economic policy conditioned last six months for ETF investors.

The effects are clear, because as our chart shows, 70% of assets market share are on Americans hands. BlackRock report on flows last October reveals that the industry counted $24.3 bn since October, 17th, because traders were waiting for a solution in Washington between Rep’s and Dem’s.

Between January and October and compared with the same period of 2012, ETF flows on equities increased in all world areas but emerging markets, where the trend is beginning to change. After a strong start in 2013, there was a shift in the line, stronger in summer. Investors are now attracted by low valuations.

US equity ETF focused on large-cap and mid-cap, with an important contribution of technology and consumer non-cyclicals. Moreover, assets are near $1 trillion, helped by double digits growths and the current records in the S&P500.

In Europe, equity products pushed up after the stagnation in the first half of the year. Flows on Europe reached $7.9 bn in October, a new record after four consecutive months with increases. The better economic outlook and the attractive valuations moved the investors to the Old Continent, rounding 30% in assets growth. In October, this figure surpassed $400 bn. A figure to take into account: Germany accounted almost $3 bn outflows.

Fixed income and money markets have been performing the worst results, with heavy outflows. Also gold summed a hard outflow in October, more than $2 bn.

In any case, US still drive the ETF markets. Not only because 70% assets are in this country, but because current risks, as a not clear Fed monetary policy (with several contradictory statements of its members) or the next debt ceiling negotiations till January, are on the view of ETF managers to decide where to put their money to obtain higher yields.